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LAX-SFO Heats Up (Again) – What Does It Mean For Airports?

LAX-SFO Heats Up (Again) – What Does It Mean For Airports?

August 10, 2013 – Avgeeks will no doubt devote lots of ink, real and virtual, to Delta Air Lines’ announcement last week of its LAX-SFO shuttle. Most, if not all, will focus on what it means for airlines and passengers,  but we got to wondering: what are the implications for airports in the Los Angeles and Bay Area catchments?

The effect of DL’s move on the number of daily seats LAX-SFO will not be significant. The dilution of RASM and route profitability could be, not only on LAX-SFO but also on complementary routes at especially proximate secondary airports. LAX and SFO are, to one degree or another, strategic for the carriers serving it. AA, DL, UA, VX and WN together will have 54 daily trips each way, and that’s before any competitive response to DL’s announcement (AA, we’re looking straight at you). Because of how quick carriers are to trim capacity at non-strategic airports to fund investments elsewhere, we think secondary airports – especially BUR, LGB, OAK and SJC – could face some intraCal risk because of this LAX-SFO development. What should they do about it?

A consultant with a hammer tends to think every issue is a nail. We’re probably as susceptible to that as any; but sometimes, issues are, well, NAILS. Our hammer is airport competition, and we think secondary airports should use it proactively to pound this nail before the problems show up in lag measures of route performance, at which point it will be difficult for them to affect what airlines might do in response.

What do you think? How do you see it? Let us hear from you…

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